Next-gen grocery: Elevating the supermarket experience

Experiment with niche and flexible formats
Having seen the “polo mint effect” of lower footfall in city centres and more shoppers in suburbs and local neighbourhoods, brands would be foolish not to explore a local format strategy. But as well as opening stores in neighbourhood locations, there are other ways for big supermarket chains to act small and deliver on a more personal level.
Demand for independent food and beverage brands is up - but supermarkets could still benefit by considering in-store collaborations, perhaps even a market hall set-up with a selection of local independent retailers which would emanate the authentic, homely feel that customers are craving right now. Walmart’s collaboration with community app Nextdoor helped neighbours support each other during the first lockdown - it was a nice touch, but it will be interesting to see how the brand builds on this avenue to promote community wellbeing in the months ahead.
Local formats aren’t the only option to explore. With growing consumer interest in plant-based diets, grocery retailers could follow Pret’s lead and consider opening vegetarian or vegan-only stores to offer a specialised service and build community around a particular cuisine. American supermarket chain Raley’s are experimenting with something similar, having recently launched their ONE Market concept store in California, promoting healthy eating by banning certain ingredients in their product offer. Making a statement like this is a bold move, but it's a sure way to build brand loyalty amongst purpose-driven consumers.
Another change in consumption habits that supermarket brands cannot ignore is sustainability. Asda is emerging as a pioneer in this space - its new eco-friendly store format in Leeds should become the new blueprint for brands everywhere, not just in grocery retail. With refill stations offering products from leading brands including Kellogg’s, PG Tips and Persil, the new concept reduces the amount of plastic packaging instore and encourages customers to use reusable containers to top up their supplies instead. Whilst it’s great to see these sustainable formats coming through, it would be even better to see widespread integration into a brand’s whole store portfolio.
Whether driven by location, diet, or sustainability, consumer behaviour over the past few months has shifted and supermarket brands need to react with more niche and flexible formats in order to serve customers the way they want to be served.